The Alibaba Group and French hospitality group Accor are forming a strategic partnership to develop a series of digital applications and loyalty programs designed to facilitate international travel for the Chinese e-commerce giant’s 700 million consumers.
Why it matters: For Accor, Alibaba offers access to the lucrative but slowing market of Chinese traveling overseas. Meanwhile, Alibaba’s Fliggy travel platform will be able to bolster its listings with Accor’s 4,900 hotels and residences in 110 countries.
- The partnership also stands to aid in Alibaba’s push to popularize Alipay internationally, as customers will now be able to use the payment service to book accommodations through Accor with the facilitation of its travel agency platform, Fliggy.
Details: With Alibaba’s help, Accor plans to spend $255 million on a new loyalty program called Accor Live Limitless (ALL). Alibaba will provide assistance on its rollout by offering digital marketing and other capabilities, according to a report by Skift.
- According to Accor CEO Sébastien Bazin, ALL will give “Chinese travelers access to exciting events and benefits.”
- Accor has also developed a certification program exclusively for Chinese customers called “Haoke” that ensures the firm’s hotels use Chinese-language signage, hire Mandarin-speaking employees, and serve Chinese cuisines.
Context: According to China’s Ministry of Culture and Tourism, people from the Chinese mainland made around 150 million trips overseas in 2018, a 14.7% surge year-on-year.
- China’s outbound tourism industry is expected to suffer over the next five years if its trade war with the US continues.
- The partnership comes just days after fintech giant Ant Financial introduced a version of its Alipay mobile payment app that allows travelers to link foreign bank cards for easy use in China.
- According to Ant Financial, the average total spend per user traveling overseas during China’s National Day holiday this year increased 15% to around $350 despite a 15.1% year on year decline in border entry and exit of mainland Chinese residents over the first six days of the holiday, according to the National Immigration Administration.
- The Alibaba-Accor collaboration coincides with Chinese travel giant Trip.com Group’s announcement of its own partnership with American travel platform TripAdvisor in an effort to expand its global presence.